Controversy Surrounds Nevada Paid Family Leave Requirement for Tax Breaks

A new paid family and medical leave requirement for companies seeking tax breaks in Nevada has sparked debate among economic development officials, who argue that the policy is impeding efforts to attract and retain businesses in the state.

Under the mandate, companies with over 50 employees must offer paid family and medical leave to workers who have completed at least one year of service. This requirement, which took effect as part of a session bill in June, mandates that employees receive at least 55 percent of their salary for up to 12 weeks, surpassing the federal standard set by the Family and Medical Leave Act (FMLA), which is unpaid.

Tom Burns, Executive Director of the Governor’s Office for Economic Development (GOED), expressed concerns about the impact of the new requirement. He cited a specific case where a company opted against relocating its headquarters to Southern Nevada due to the obligation to provide paid leave, stating that they were unwilling to offer the benefit selectively across different states of operation.

Burns emphasized that the requirement was starting to influence relocation decisions negatively. Tina Quigley, President and CEO of the Las Vegas Global Economic Alliance, echoed these concerns, noting that the policy surpassed California standards, making it challenging to attract businesses from neighboring states.

The move aligns with a broader trend, with thirteen states and the District of Columbia already having mandatory paid family and medical leave laws for private employers. However, the stringent nature of the Nevada policy has raised eyebrows within the business community.

Despite criticism from economic development officials, supporters of the policy, including State Sen. Edgar Flores, argue that it promotes a balance between pro-business initiatives and family-friendly practices. Flores championed the bill during legislative sessions, framing it as a means to attract socially responsible businesses to the state.

However, further concerns about the healthcare coverage provided by companies benefiting from tax breaks are also in question. State Sen. Fabian Donaté asked whether companies are covering their employees adequately, pointing to statistics showing a significant number of employees enrolled in Medicaid despite working for companies receiving substantial tax breaks.

GOED’s tax abatement programs mandate that businesses cover 65 percent of employee health insurance premiums, exceeding the Affordable Care Act requirement of 50 percent. Despite this, concerns persist about the affordability of healthcare for some workers, leading to reliance on Medicaid.